Phil Williams and Liz Johnson are 60% and 40% partners, respectively, in Williams & Johnson

Partnership, Their beginning basis is $33,000 for Phil and $31,000 for Liz. The partnership had the following activity during the year:

a. Calculate the ordinary income for the partnership and prepare page 1 of Form 1065.

b. What is the ending basis for Phil Williams?

c. What is the ending basis for Liz Johnson?

Transcribed Image Text:

Income Interest income Dividend income (qualified) Long-term capital gains Total Revenue $336,123 1,259 4,586 13,458 $355,426 Expenses: Salaries and wages (non-partners) Guaranteed payments Williams Johnson Depreciation (MACRS-includes $9,000 $179 expense) Interest expense Taxes and licenses $ 47,000 75,000 50,000 41,888 5,220 15,548 Meals and entertainment (100%) Auto Insurance (non-partner health) Accounting and legal Repairs Charitable contributions Payroll penalties Total Expenses Net Income 15,257 5,254 6,000 2,800 1,200 2,500 500 $268,167 $ 87,259 Income Interest income Dividend income (qualified) Long-term capital gains Total Revenue $336,123 1,259 4,586 13,458 $355,426 Expenses: Salaries and wages (non-partners) Guaranteed payments Williams Johnson Depreciation (MACRS-includes $9,000 $179 expense) Interest expense Taxes and licenses $ 47,000 75,000 50,000 41,888 5,220 15,548 Meals and entertainment (100%) Auto Insurance (non-partner health) Accounting and legal Repairs Charitable contributions Payroll penalties Total Expenses Net Income 15,257 5,254 6,000 2,800 1,200 2,500 500 $268,167 $ 87,259

Answer rating: 100% (QA)

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